Seagate Technology shares drop on analyst downgrades, sector weakness

Seagate Technology shares fell 5.7% in morning trading on Friday, continuing a decline that began after the company reported first-quarter results on October 27. The drop followed several analyst downgrades and price target cuts despite the storage maker posting record quarterly results that exceeded Wall Street expectations, and a broader sector-wide weakness.

The company reported fiscal first-quarter revenue of $4.233 billion, a 61% increase from the prior year. Non-GAAP diluted earnings per share reached $7.68, beating consensus estimates by approximately 3.5%. Seagate also issued guidance for the next quarter that surpassed analyst expectations.

Summit Insights downgraded the stock to Hold, pointing to a less favorable industry environment expected in 2027. Bernstein SocGen reduced its price target to $1,100 from $1,350. Susquehanna, Citigroup, and TD Cowen also lowered their price targets following the earnings report.

Goldman Sachs maintained its Buy rating but noted that any breakdown in industry-wide hard drive supply discipline could threaten the tight supply-demand conditions that currently support Seagate's pricing power and margins.

UBS warned that Western Digital's ongoing transition to heat-assisted magnetic recording technology could increase industry supply, creating additional uncertainty for the sector.

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